ANNAPOLIS – Lawmakers breathed life back into efforts to deregulate Maryland electric utilities Friday, setting a July 2000 deadline for competition and offering protections for existing utilities.
The Senate Finance Committee, at the urging of Senate President Thomas V. “Mike” Miller Jr., tacked the proposals onto a House bill aimed at letting Baltimore Gas and Electric Co. take the first steps toward deregulation.
The amendments, worked out by Miller and Sen. Thomas L. Bromwell, D-Baltimore County, are aimed at addressing concerns that were threatening to paralyze deregulation.
Alabama is the only other state that has not set a target date for deregulation, said Bromwell, the Finance Committee chairman. He said that added to the sense of urgency.
“Everyone in the country is moving forward now,” he said. “We don’t want to be the first state, but we sure as hell don’t want to be the last.”
Bromwell — who said at the start of the session that he would not rush deregulation just for the sake of keeping business happy — said the amendments offered Friday were designed to “create safeguards for as many sides as possible.”
But officials with BG&E declined to comment after Friday’s committee meeting, saying they needed more time to study the proposal and confer with other Maryland utilities. Officials with the Potomac Electric Power Co. could not be reached for comment Friday.
Investor-owned utilities like PEPCO and BG&E do not oppose deregulation but have said they do not want to rush into competition until more substantial issues have been dealt with.
Both utilities want to see action taken on stranded costs — money invested in operations that were not passed on to consumers all at once because it would have raised rates too quickly. They also wanted make sure that the current tax structure is not still around under competition.
Under the proposal unveiled Friday, the Public Service Commission would have to address stranded costs by Oct. 1, 1999. The plan also guarantees that competition would not begin until legislation is enacted to restructure utility taxes.
Bromwell said Friday he did not want to see “our guys” at a disadvantage. But not moving forward to competition gives the impression that Maryland is not interested in deregulation.
“Consumer costs are going down all over the country, that’s what this bill is about,” Miller said before the vote. “It’s … bringing investor-owned utilities into the real world.”
The amendments were tacked on to House Bill 10, which would let BG&E set up a holding company to control it and its non- regulated subsidiaries.
BG&E Chief Financial Officer David Brune said the holding company would give the utility the financial freedom it needs to prepare for competition, by spending utility revenues to build up business.
“To grow this business, we’re going to need some financial flexibility,” Brune said at a hearing Tuesday, before the amendments were added to the bill.
While BG&E officials were cautious Friday, other business groups said they were pleased to see deregulation moving forward.
“Everybody’s a little unhappy,” said Carolyn T. Burridge, a lobbyist for the Chemical Industry Council of Maryland. “He (Miller) made us take stranded costs and taxes even though we thought it was premature and he made the utilities take the date certain.”
And a lobbyist for Enron was also pleased. The Texas utility company is eager for competition and already has an office in Bethesda.
“It preserves the flexibility of the PSC and it gives the business community a date certain and a competitive advantage with other states,” said Gary Alexander, the Enron lobbyist. “It moves the issue forward.”
The bill, approved 10-0 by the committee, now heads to the full Senate. If it is approved there, it will go back to the House for consideration.